Help
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Can someone please help me.
Is there any eay way to remember the layout of a P & L account and a balance sheet??
Is there any eay way to remember the layout of a P & L account and a balance sheet??
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Comments
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Re:Help
Just keep practising questions and it will become automatic.
I don't think there is any other way really.
Annette0 -
Re:Help
Difficult, but we can only try;
The P&L comes in two halves; money in - income - on the top half with money out - expenses - on the bottom half. Income minus expenses equals profit or (loss) for the year.
The balance sheet is in three parts; what you own - assets - make up the first third. What you owe - liabilities - make up the second third. What you own (assets) less what you owe (liabilities) gives you your net assets (or capital/equity) figure. The remaining third shows how the company is funded and is usually made up of capital, shares, profit, reserves etc less drawings. This figure must match the net assets/equity figure at the bottom of the second third.
The exact layouts you'll have to learn unfortunately, though if you can immediately recognise the differences between income and expenses as well as those between assets and liabilities - and you should by now at intermediate level - then you're most of the way there.
Robert0